Technical Analyst, Saxo Bank
Summary: S&P 500 in an uptrend facing strong resistance at 4,300
Nasdaq 100 uptrend is a bit stretched with declining volume, but Index still has room to go higher before strong resistance
Russell 2000 small cap Index broken bullish. Potential to 1,928
VIX Volatility Index taking out support suggesting even lower levels. 12.40 next?.
S&P 500 is in an uptrend after closing above 4,200. RSI is showing positive sentiment i.e., supporting the bullish picture for S&P 500. However, the trend could be cut short at the resistance area around 4,308-4,325.
A close below 4,098 will reverse the uptrend. A close below the lower rising trendline would be first indication of this reversal scenario to unfold.
Weekly chart: RSI has closed above 60 indicating likely higher levels om the medium-term
A close above there 4,325 could pave the way 4,546 resistance area.
Nasdaq 100 seems to be pausing a bit with a couple of days of indecision testing the upper trendline in what appears to be a rising channel.
The past couple of days the traded volume has been declining which is and indication of a weakening of the uptrend.
Divergence on RSI supports the picture of a trend that is weakening and indicates a correction could be seen.
However, to reverse the uptrend a close below 13,520 is needed. First indication of that scenario to play out would be a break of the lower rising trendline.
Medium-term the uptrend is also intact with no RSI divergence supporting the view of Nasdaq 100 could reach resistance at around 15,265
Russell 2000 small cap Index has broken above resistance at around 1,825 thereby establishing an uptrend. RSI is back above 60 i.e., in positive territory indicating higher Russell 2000 levels are likely.
Russell 2000 have formed a Double Bottom like pattern that is now confirmed with a potential target of 1,928 as indicated by the two vertical arrows.
If Russell closes above 1,928 there is room up to 2K.
To reverse the bullish trend a close below 1,800 is needed.
VIX volatility Index future has broken below 2021 low at around 16. Negative RSI indicates further downside for the VIX . A move down to strong support at around 12.40 is in the cards.
To demolish this medium-term bearish picture a close above 22.10 is needed
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.